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State approves Sword participating area Decision also certifies Cook Inlet Energy’s Sword No. 1 well at West McArthur River as capable of producing in paying quantities ERIC LIDJI For Petroleum News
The state has approved the formation of a Sword participating area and certified the Sword No. 1 well at the West McArthur River unit, on the west side of Cook Inlet.
The pair of July 23 decisions more fully incorporates the well into the unit. The Sword participating area includes 360 acres over portions of ADL 359111 and ADL 17602. The unit already includes the Area 1 participating area over a portion of ADL 359111 (see map).
In its initial request, operator Cook Inlet Energy LLC had also requested an expansion and separately a contraction of the West McArthur River unit boundary. The state Division of Oil and Gas approved those requests in a separate decision, earlier this year.
Recent activities Exploration in the area began in 1965, when Pan American Petroleum Corp. drilled the West Foreland Unit No. 1 well within the boundaries of the current Sword participating area, approximately half a mile west of the Sword No. 1 well. The earlier well encountered oil-stained reservoir rocks but not free flowing oil. A failed packer prevented the company from conducting a drill stem test. The well was plugged and abandoned.
The state approved the formation of the 6,330-acre West McArthur River unit in July 1990 over two leases - ADL 359111 and ADL 359112. Stewart Petroleum drilled the WMRU No. 1 well in June 1991, one mile south of West Foreland Unit No. 1. The state approved the formation of the Area 1 participating area in September 1994. The participating area reached peak production in January 1996, at 4,957 barrels per day.
Operator Cook Inlet Energy acquired the West McArthur River unit in 2009 as part of the bankruptcy proceedings of former operator Pacific Energy Resources Ltd. An expansion and a related contraction approved earlier this year left the unit covering just 640 acres.
Cook Inlet Energy drilled Sword No. 1 in 2013 on ADL 17602, which was outside the West McArthur River unit boundaries at the time and held by production at the neighboring Trading Bay unit. Cook Inlet Energy and Hilcorp Alaska LLC jointly owned the lease. When Sword No. 1 encountered commercial volumes of oil, Trading Bay unit operator Hilcorp farmed out its interest in the well to Cook Inlet Energy. Cook Inlet Energy later acquired 100 working interest in the relevant segment of lease ADL 17602.
Sword No. 1 began pilot production in November 2013 at an initial rate of 800 barrels per day and has since averaged between 500 and 600 bpd from the Hemlock Zone, Lower Tyonek “G” Oil Zone and Lower Tyonek “G” Upper Zone, according to the state.
Based on information Cook Inlet Energy submitted to the Alaska Oil and Gas Conservation Commission in June 2015, comingled production from the well will be allocated under the following formula: 29 percent from the Hemlock Zone, 1 percent from the Lower Tyonek “G” Oil Zone and 70 percent from the Lower Tyonek “G” Upper Zone. Those percentages will remain in effect until the company submits revisions.
The Sword prospect is one of two Cook Inlet Energy has been pursuing at the unit.
The company has previously discussed plans to explore a Sabre prospect at a different segment of ADL 17602. The company has also proposed a Sword No. 2 well.
Certification On Nov. 25, 2013, Division of Oil and Gas officials witnessed a three-hour flow test where Sword No. 1 produced 121.7 barrels of oil, which would approximately 973.9 barrels per day. The well was producing 600 barrels per day when Cook Inlet Energy submitted its application for certification in August 2014, according to the state.
Those rates qualify the well as being “capable of producing in paying quantities,” according to the state. The certification protects the well against certain expirations.
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